ASIC’s cost recovery framework has been finalised, incorporating changes made after broad industry consultation.
The 2017–18 regulatory costs for operating expenditure (excluding depreciation and fee-for-service activities) and capital expenditure will be recovered from the subsectors ASIC regulate.
The levies will also include a clawback of prior year market supervision expenditure that remains unrecovered as at 30 June 2017.
ASIC will not recover the non-ongoing costs associated with the ‘Improving outcomes in financial services’ budget measures, approved in the 2016–17 Budget; these will be recovered by the Australian Prudential Regulation Authority (APRA) through the financial institutions supervisory levies until 30 June 2019. From 1 July 2019, the ongoing costs associated with this measure will be recovered through the ASIC industry funding model.
APRA will continue to recover the costs of the Superannuation Complaints Tribunal through the financial institutions supervisory levies until the 2020–21 financial year, just prior to its abolition.
APRA attributes costs to each subsector based on the amount of effort spent regulating that subsector.
The first invoices will be issued in January 2019 and will recover costs for regulatory services for the 2017–18 financial year.
The invoices will be based on the number of regulated entities in a sector and, in most cases, information provided by regulated entities via ASIC’s new online portal.
Report highlights per sector include:
- Registered liquidators: The fixed component of the levy has been halved to $2,500. The graduated component of the levy will be based on:
- the number of new and ongoing external administration appointments the liquidator accepts, and
- the number of prescribed events notified to ASIC and the public during the year.
- Payment product providers: a flat levy will apply in 2017–18. In 2018–19, this will be replaced by a graduated levy based on revenue from payment product provider activity with a minimum levy of $2,000 payable by all payment product providers.
- Credit intermediaries: The graduated component of the credit intermediary levy will be charged on the number of authorised representatives the intermediary has at 30 June.
- Superannuation trustees: The graduated component of the levy will be based on the total value of assets as at 30 June in registrable superannuation entities, excluding assets that are an interest in another registrable superannuation entity operated by the trustee.
- Responsible entities: The graduated component of the levy will be based on the total value of assets as at 30 June in registered schemes, excluding assets that are an interest in another registered scheme operated by the responsible entity.
- Crowd Source Funding Intermediaries and Corporate Collective Investment Vehicles: Once licence arrangements are in place, the Government will consider the most appropriate mechanism to recover the costs to regulate these industry participants.
- Wholesale trustees: a flat levy is proposed in 2017–18. It will be replaced by a graduated levy in 2018–19, based on the value of assets as at 30 June in all unregistered managed investment schemes issued by the trustee with a minimum levy of $1,000 payable by all wholesale trustees. The value of assets that are an interest in another unregistered managed investment scheme operated by the wholesale trustee will be excluded.
- Operators of an IDPS: a graduated levy based on revenue from IDPS activity undertaken under the entity’s licence will apply with a minimum levy of $10,000 payable by all Operators of an IDPS.
- Australian market licensees and exchange operators: The levy for large securities exchange operators will be graduated based on the value of transactions traded on each exchange.
- The costs to regulate market participants will now be split between large securities exchange participants and large futures exchange participants. Participants in these subsectors will be charged a fixed levy of $9,000 per exchange plus a graduated levy based on their share of the subsector’s messages sent and transactions reported on a large securities or futures exchange that are recognised by ASIC’s Market Surveillance System.
- Securities dealers: The definition of securities dealers has been changed to exclude dealers with a transaction value of less than $250,000.
- Investment banks: ASIC’s costs to regulate investment banks will now be split between the Corporate Advisor and OTC trading subsectors.
- Corporate Advisors will be charged a fixed levy of $1,000 and a graduated levy based on revenue above $100,000.
- OTC Traders will be charged a fixed levy of $1,000 and a graduated levy based on the number of full time equivalent staff engaged in OTC trading activities.
- Financial advice sector: A fixed levy of $1,500 has been introduced for licensees authorised to provide advice on relevant products. The graduated levy for these licensees is based on the number of advisers on the Financial Adviser Register. Please note that for securities dealers, large securities exchange participants and large futures exchange participants the graduated component will exclude advisers who only provide advice on quoted products, products traded on a foreign financial market or basic banking products.
- Insurance sector: The definition of insurance product issuers has been expanded to include Australian financial services licensees who make offers to arrange for the issue of insurance products under an intermediary authorisation with an APRA-regulated insurer that does not hold a licence.
